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Lawmakers Press Trump, Pentagon Over $10 Billion JEDI Cloud Deal

Two key Republican lawmakers are trying to pressure the Trump administration to intervene in the Pentagon’s plan to award $10 billion in cloud-computing services, citing concerns about the handling of the bid, which rivals say favors Amazon.com Inc.

(Bloomberg) -- Two key Republican lawmakers are trying to pressure the Trump administration to intervene in the Pentagon’s plan to award $10 billion in cloud-computing services, citing concerns about the handling of the bid, which rivals say favors Amazon.com Inc.

Representative Steve Womack of Arkansas, who serves on a panel that funds the department, wrote to President Donald Trump seeking his “personal attention” for the award, saying that the president should approach the contract the same way he pushed for a lower price for new Air Force One planes being built by Boeing Co.

Senator Ron Johnson of Wisconsin, who chairs the chamber’s Homeland Security Committee, asked in a June 24 letter to Acting Defense Secretary Mark Esper that the award -- expected to come as soon as next month -- be delayed until an inspector general investigation of the process is complete.

The single-award contract, known as the Joint Enterprise Defense Infrastructure, or JEDI, has become a corporate battleground as cloud providers use lobbying and lawsuits to try to gain the edge in the procurement, which industry-watchers believe is all-but-certain to go to Amazon’s cloud division, Amazon Web Services.

Trump has spoken out frequently on Pentagon projects that have already been awarded -- from his demand for new paint colors for Air Force One to insisting on price cuts for F-35 jets. He has also called on the Navy to use old-fashioned steam-based catapults on its new aircraft carriers instead of a more advanced but occasionally unreliable electromagnetic system.

But presidential interference in the middle of the competition for a Pentagon contract would be virtually unheard-of, and could give a losing bidder grounds for a challenge before the Government Accountability Office or in the courts.

“The JEDI program has the potential to waste hundreds of millions of dollars on technology that may not be the latest and most secure,” Womack wrote in his letter, which is dated June 12. He also criticized the bid for “limiting competition” through the criteria for the award.

In March, lawmakers responsible for defense funding ordered the Pentagon to justify making the contract a single award. Womack, a longtime skeptic of the contract, said Defense Department reports on the issue had been “completely unsatisfactory.”

Johnson noted news reports on potential conflicts of interest raised in a lawsuit by Oracle Corp., which sued in federal court to stop the award. The Pentagon launched an internal review and an investigation by the department’s inspector general.

The Pentagon determined in its internal review there was no adverse impact on the integrity of the acquisition process and allowed the bid to go forward even while the inspector general investigation is continuing. Officials said last month they expect to award the contract in late August.

The Pentagon is preparing for the rollout of the program even though the requirements are still being challenged in court by Oracle.

Oracle filed an amended complaint in May alleging that at least two Pentagon employees were offered jobs at Amazon while working on the procurement. Amazon’s cloud unit, AWS, has previously referred to the complaint as “wildly misleading.”

“If the investigation confirms the allegations of impropriety after the contract has already been awarded, it could significantly erode public trust in the fairness of the government procurement process and, if appropriate, may be very difficult to unwind a project that is already underway,” Johnson wrote in his letter.

Womack’s and Johnson’s offices confirmed the authenticity of the letters. Representatives from the Pentagon and the White House didn’t immediately respond to requests for comment. Amazon declined to comment.